In theory there's a separation of power between them, but in practice it's irrelevant because the people who own the banks also own the governmnet.

> I can foresee a future where USDCoin is developed by the GOV and legacy currency is deprecated.

They were already doing this. That is what digital banking is.

> Again, I understand that the gov can seize your bank account but they at the very least have to approach a non government entity and make the request first.

They're not independent and haven't been since at least the early 1900s.